Transforming Insurance with Technology: Trends and Insights Shaping the Future

Introduction

Across Africa, insurance is undergoing a quiet revolution. While coverage has traditionally been limited to wealthier households or large companies and has remained low overall, technology is beginning to break down the barriers that once seemed impossible to surpass. Over the past few months, a combination of new funding, policy reforms, and innovative ideas has gained momentum that could ultimately transform the industry for the better.

This year has seen continued momentum and significant milestones — from advancements in satellite-enabled crop protection to tech incubators nurturing the next generation of insurance innovators. This article takes a closer look at these ongoing developments and their latest impact.

Market Overview and Investment Flows

The appetite for Insurtech solutions remained strong the second quarter of 2025. Startups in the sector attracted roughly $65 million in new funding, which, while slightly below the record levels seen earlier in the year, was still well ahead of the pace set in 2024.

This sustained investor confidence was evident in several standout deals. Noteworthy increases included Inclusivity Solutions, which added $4 million to broaden its partnerships in Francophone Africa, and Turaco, which raised $7 million to continue scaling its embedded health microinsurance model. Altogether, these stories reflect a growing consensus: digital tools are the surest path to unlocking insurance for millions who have never had it before.

Yet, despite this encouraging progress, the protection gap remains vast. According to a recent Swiss Re Sigma report, insurance penetration in Africa remains at around 3% of GDP—significantly behind the 9% average in Asia and even further from the global average of approximately 11%. Bridging that divide is both the sector’s biggest challenge and its greatest opportunity.

Trends Shaping the Insurtech Space

Embedded insurance has continued its steady growth. In Nigeria, MTN and aYo surpassed the milestone of having sold over 10 million policies through a model where premiums are deducted directly from customers’ airtime. By meeting people where they already spend their money, these services avoid the old friction of paperwork and bank branches.

Meanwhile, AI-driven underwriting and customer support are no longer just theoretical. A McKinsey survey published in June found that about 40% of insurers across Africa are experimenting with generative AI tools to improve claims management, fight fraud, and provide quicker responses to policyholders. If these pilots succeed, AI could make insurance not only more efficient but also more human—responsive, transparent, and easy to understand.

Alongside AI, another trend gaining traction is the rise of cyber insurance. As smaller businesses begin to recognise that going digital introduces new kinds of risk, many are seeking affordable ways to protect themselves against data breaches and ransomware attacks.

The Role of Incubators and Accelerators

Beyond funding, much of the sector’s dynamism originates from communities of practice where founders, mentors, and regulators learn together.

One example of this collaborative energy in action is ZEP-RE’s recently concluded flagship innovation program in Kigali, Rwanda. The initiative brought together promising startups, industry experts, and investors to catalyse new solutions. The top five startups selected for investment—EXUUS (Rwanda), NDAI Limited (Kenya), BAS Technologies (Nigeria), Gigimile (Nigeria), and SOSO CARE (Nigeria)—are currently undergoing due diligence and related processes in preparation for funding.

At the same time, the BimaLab Africa Insurtech Accelerator, supported by FSD Africa and the Swiss Re Foundation, opened applications for a new cohort in May 2025. The accelerator will guide 35 early-stage ventures over six months, focusing on climate resilience and inclusive insurance models.

Together, these programmes are building a pipeline that takes promising ideas from sketchbook to scale – a vital ingredient for maintaining innovation.

Regulatory Developments

While entrepreneurs and investors have been busy, regulators have kept pace—introducing innovation hubs, sandboxes, and policy reforms to support responsible growth. These efforts are now taking shape across the continent, with notable initiatives emerging in Nigeria, South Africa, and East Africa.

Nigeria’s National Insurance Commission (NAICOM) expanded its sandbox program to include 10 more Insurtechs experimenting with innovative approaches to distribution and pricing. In South Africa, the Financial Sector Conduct Authority (FSCA) published draft conduct standards to clarify expectations around digital insurance and consumer protection.  Meanwhile in East Africa, Kenya, Uganda, and Tanzania signed a new memorandum aimed at harmonising rules for mobile insurance by 2026—a step that could smooth the path and ease the way for cross-border products.

Consumer Education

Technology is transforming insurance education across Africa by simplifying access to information. Platforms like Kenya’s KnowInsurance.co.ke and South Africa’s Moneyversity+ are breaking down complex terms through videos, quizzes, and plain-language guides. Tools like Hollard’s WhatsApp chatbot also educate users while handling claims, reaching millions through familiar digital channels.

Insurtechs are embedding education directly into products. ACRE AFRICA trains farmers via USSD, mobile apps and village champions, while Turaco and M-KOPA bundle insurance with smartphones, using SMS and video explainers. These tech-driven efforts are closing knowledge gaps and making insurance more accessible across the continent.

Persistent Challenges

Despite all the optimism, the road ahead faces hurdles. A significant proportion of Africa’s population—around 45%—still lacks internet access. Even among those who are connected, many have never purchased insurance before and remain unfamiliar with or distrustful of how it works, posing a major challenge to inclusive insurance uptake. Regulatory fragmentation remains a major challenge. Each country operates under its own set of rules, approval processes, and reporting standards, making cross-border expansion costly and complex for startups. At the same time, growing concerns around data protection are emerging as companies collect more personal information than ever before.

Opportunities and What Lies Ahead

Despite ongoing challenges, confidence in Africa’s insurance landscape remains strong. The continent’s growing youthful population, rising smartphone usage, and a quest for resilience all indicate growth. Parametric models can provide quicker, fairer payouts during climate shocks. As small businesses digitise, they actively seek protection solutions. At the same time, the integration of AI into insurance operations is not only improving internal processes but also reinforcing trust through more transparent, data-driven decision-making.

Analysts anticipate that, in Africa, digital gross written premiums could surpass $2.5 billion by the end of this year, up from $1.7 billion in 2023. Whether that projection comes true will depend on more collaboration—between startups and incumbents, regulators and founders, technologists and insurers.

Learning from the World

Africa is not the first region to encounter this challenge. In India, companies such as Acko and Digit have built billion-dollar businesses by integrating insurance to everyday apps and payment processes. Brazil’s sandbox regulations have facilitated faster experimentation. These examples demonstrate that it is possible to innovate without sacrificing trust or stability and that well-thought-out policy makes a difference.

Conclusion

These developments indicate that Africa’s insurance story is no longer solely about what is missing and reimagining what could be. The right combination of funding, mentorship, regulatory support, and consumer education is aligning. Now, the challenge is how to sustain the momentum and ensure that everyone—from rural farmers to urban entrepreneurs—can benefit.

 

References

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